InfoSearched
Published -
- July 15, 2020
- 10:22 am
Apple in fight over $15 billion tax bill
Apple won a court case Wednesday against the European Commission over a dispute concerning 13 billion euros ($14.9 billion) in Irish taxes.
How did Apple respond to the EU’s allegations and what was the result of their challenge?
In a significant victory for Apple, the European Union’s second-highest court has reversed a decision by the European Commission to impose a whopping $15 billion tax bill on the technology giant. The EU court ruled that the European Commission failed to demonstrate that Apple had received illegal state aid from Ireland, thus overturning a verdict delivered by the Commission in 2016.
This comes as a major boost for Apple as it had challenged the EU’s decision and argued that it had not received any special treatment from Irish tax authorities. The EU court’s ruling sends a strong message to the European Commission, which has been scrutinizing the tax strategies of multinational companies, including Apple, Google, and Amazon.
Apple had been accused of securing a sweetheart tax deal with Ireland by transferring billions of dollars’ worth of profits to what amounted to little more than a mailbox on the island of Jersey. The European Commission had claimed that this was in violation of state aid rules, which prohibit governments from providing financial advantages to certain companies.
However, the EU court stated that the European Commission had failed to show that Apple was granted any advantages that were not available to other companies operating in Ireland. The EU judges also pointed out that Ireland’s tax treatment of Apple was not illegal under Irish law, and that it was reasonable for the Irish authorities to allocate most of Apple’s profits to a “head office” that existed only on paper.
The Irish government has welcomed the EU court’s verdict, stating that it had at all times “acted in full compliance with Irish and European law.” Ireland, which has a corporate tax rate of just 12.5%, has been a magnet for foreign companies seeking to minimize their tax bills.
The EU’s decision to impose a massive tax bill on Apple was its largest ever involving a single company. While the EU court’s ruling is likely to be appealed by the European Commission, it has provided a much-needed relief for Apple, which is facing regulatory probes and criticism from lawmakers over its dominance in the global smartphone market.
In conclusion, the EU court’s decision to back Apple in its legal fight against the $15 billion tax bill is a significant setback for the European Commission’s efforts to crack down on tax avoidance by multinational companies. This ruling sends a clear message that the EU must follow due process and that allegations of illegal state aid must be substantiated by evidence. While Apple may have won this battle, the ongoing tax dispute highlights the need for greater transparency and fairness in the global tax system.
